3SOF

The cold I got yesterday didn't get better, it got worse, and I'm already quite tired from working at the Premium area today.

The winners from yesterday's poll were WWAT.OB, ABAT.OB and TSL, but I'll have to pass them for tomorrow.

I wish a nice day for your investments, see you

(will leave this thread open, change title)

By the way, since I put here my bear market call article, let me also put here my update to that article, written today:

«Hi

I've read the initial article on this thread again, and my three main bear motives were:

1) China, after 20 years of growing at an average annual pace of 10%, could have a recession. The stock market signaled that.

2) The US consumer was overextended into debt and there could be a consumer led recession in the US

3) The market itself, with that big red marubozu day with explosive volume said a bear market or even a crash could unfold

Given this environment I concluded I should sell all stocks and start shorting, which I did. At the time I wrote the article the Main Portfolio was up 10.41% in 2007. As time went by, naturally I started investigating if my bear motives were warranted or not. Here's what I saw then:

1) Even though China's economy has been growing at a 10% average annual pace for 20 years, Consumption still accounts for just 35% of GDP, which is remarkable, since in all developed economies Consumption usually accounts for at least 2/3 of the economy. There's a big long term growth opportunity in China as the Chinese consumer starts spending just a bit more. The Chinese market didn't signal anything, because the bull market in Shanghai stocks is still young:



2) As for the American consumer over extension into debt, we've already seen and priced in the effects of that with some sub prime lenders going bust and bank stocks going down. But bank stocks recovered ground, why? Because banks were already trading at recession times valuation!

One might think that the full effects of a full blown recession aren't priced in. And I agree. But there's no certainty if there will be a recession or not, and even if it happens, it depends on the magnitude of the recession. In 1990-91 there was a severe recession in the US, yet, the bull market that started in 1982 ... just continued.

3) As for the third aspect, the market itself, the significance of that red marubozu was greatly diminished by yesterday's close above the midpoint of that candlestick. The market is no longer saying "I'm bearish", it is saying "I'm bullish":



When I wrote the initial article of this thread, the Main was up 10.41% in 2007 and today it is up 12.24%. So I believe that even with several mistakes and changes of opinion, I survived pretty well and even prospered a bit. But short term results aren't the best part of all this, since I've learned important stuff from this experience:

- I've learned I shouldn't short stocks because the long term return of a short sale is always lousy, even if I'm right. To have better returns I would need to employ leverage and that increases risk by a lot, it's not worth it. Therefore, after I close GOOG's short, I'll probably never short another stock in my entire life, it just doesn't make economic sense.

- I've learned that exotic products like options don't increase the long term returns of a portfolio. They are short term trader's and risk lover's type of products and I'll never touch them again.

- I've learned, also from the study of previous bear markets, that there are always stocks and groups moving higher, even when the S&P 500 goes down by 50% like it did in the 2000 - 2003 period as housing stocks, for example,  rose ten fold. My money would have been much better spent buying those housing stocks than shorting internet stocks that went from $100 to below $1, returns would have been ten times larger !
Therefore I should concentrate on finding very attractive long term picks for the Main Portfolio and ignore the general market movements. Think micro instead of macro.

That's what I'm doing and will continue to do. This is a very instructive thread and the period we went through was amazing.

Thank you »

NWD to post earnings tomorrow.  Posted $0.08 last quarter and trades at only $1.64.  If it posts anything near $0.08 again, NWD could rise quickly. Just something to watch.

TSL up another 7.5% this morning.

Quote from: buddjas1 on March 22, 2007, 10:00:21 AM
NWD to post earnings tomorrow.  Posted $0.08 last quarter and trades at only $1.64.  If it posts anything near $0.08 again, NWD could rise quickly. Just something to watch.

looks good...thanks

New Pick:

HRSH

Key Stats:
Market Cap (intraday):   27.63M


Profile:
Hirsch International Corp. provides electronic computer-controlled embroidery machinery, and related products and services in the United States. The company offers single- and multi head embroidery machines; proprietary application software; embroidery parts, supplies, and accessories; and embroidery products. Its customers include contract embroiderers, manufacturers of apparel and fashion accessories, retail stores, and embroidery entrepreneurs. The company was founded in 1970 and is headquartered in Hauppauge, New York.

Recent News:
Hirsch Reports 150% Increase in 2006 Net Income and Tripling of Operating Profits
http://biz.yahoo.com/bw/070320/20070320005379.html?.v=1

...close to a buy point???

Does any1 have thoughts on SIGM? They reported a great quarter yesterday..and seems to be a nice story in the making..but they're results are a bit clouded with options-backdating issues.

David, could you pls. add to the poll??
Thanks,
Nick

hi dave,
what you think about GENR?

thanks

Please add GSX to the next poll. 

https://wachseconline.wachovia.com/NASApp/eBrokerage/FUSResearch/GSX032007-142629.pdf

David Please look at this great stock INPC  it looks great technically and could double in a few months

INPC

David what do you think of HOKU here?

Solar DLSL.ob is running here too.

OTD .. looks like it may be at the start of a run.  There is a ton of interest in bio-diesels and this one apparently is the best company in the group.

Buddjas I took a position in GSX. Thanks for bringing it to my attention.

No problem.  I took a large position this morning myself.  Let's see if we cannot get at least 2.50 today.